PHILIPPINES: PARALLEL PROBLEM

01 October 2007
There are a number of ways in which IP owners can tackle parallel imports in the Philippines. Ignacio S Sapalo of
Sapalo Velez Bundang & Bulilan outlines the options Regardless of where we live, in Asia, America and Europe, we
find a large quantity and variety of goods that have been imported from other countries in our department stores. This
shows that governments and international organizations have succeeded in promoting the flow of goods between
different markets worldwide. Technology and the worldwide web have hastened the pace of this phenomenon. The
Philippines is a developing country in a region experiencing the fastest economic growth. It is therefore timely to
discuss the Philippines laws on parallel imports.
TRADE
MARKS
The law on trade marks in the Philippines, Section 166 of Republic Act 8293, the Intellectual Property Code (IP Code),
allows the importation of merchandise that are genuine products, sourced from the owner and registrant of the brand
that the product bears. Our Bureau of Customs issued the Customs Administrative Order (CAO) 6-2002 to implement
the IP Code and determine which goods to seize at the border. It prohibits goods which copy or simulate any mark or
trade name registered with the Intellectual Property Office (IPO) in accordance with the IP Code, without the
authorization of the registrant. In addition, COA 6-2002 prohibits goods that copy or simulate wellknown marks and
those that unfairly compete with products bearing marks, whether registered or not.
CAO 6-2002 adheres to the rule set by the trade mark law allowing the entry of parallel goods at the border. This
arrangement facilitates the entry of cheaper imported products, which the lower cost of production in the country of
manufacture makes possible. It poses a serious problem to local licensees or distributors of the same product in the
domestic market as they wish to protect their market share. They frequently take legal measures to prevent the entry of
parallel imports to the Philippine market as the two cases, which I will now discuss.
YU
V
COURT
OF
APPEALS
In Yu v Court of Appeals 217 SCRA 329, the exclusive distributor of House of Mayfair wallcovering products in the
Philippines brought proceedings against his former goods dealer, Unisia Merchandising Co. They had purchased
merchandise from the House of Mayfair in England and sold it in the Philippines. The Supreme Court ruled:
Injunction is the appropriate remedy to prevent a wrongful interference with contracts by strangers. Although its
liability does not emanate from the four corners of the contract establishing the exclusive license agreement, in respect
of which Unisia is not a party, its accountability is an independent act generative of civil liability To our mind, the
right to perform an exclusive distributorship agreement and to reap the profits resulting from such performance are
proprietary rights which a party may protect, which otherwise may not be diminished, may be rendered illusory by the
expedient act of utilizing or interposing a person or firm to obtain goods from the supplier to defeat the very purpose
for which the exclusive distributorship was conceptualized, at the expense of the sole authorized distributor.
This does not necessarily mean that when a trade mark owner appoints an exclusive licensee or distributor to market
his products in the Philippines and a person other than the exclusive licensee or distributor imports the products, that
person is liable for damages. The court must find that fraud or deceit is present. In Yu v Court of Appeals , the court
found:
that the House of Mayfair in England was duped into believing that the goods ordered by the defendant were to be
shipped to Nigeria only, but the goods were actually sent to and sold in the Philippines. A ploy of this character is akin
to the scenario of a third person who induces a party to renege or violate his undertaking under a contract thereby
entitling the offended part to legal relief (Article 1314, New Civil Code).
Solid
Triangle
Sales
v
The
Sheriff
of
RTC
Quezon
City
In Solid Triangle Sales Corp v The Sheriff of RTC Quezon City, Branch 93 , 370 SCRA 509, a criminal action for
unfair competition was brought by Solid Triangle, the exclusive distributor of Mitsubishi Corporation of Japan, against
Sanly Corporation, the importer of Mitsubishi photographic paper, under the law on trade marks. The court dismissed
the action because Sanly Corporation did not pass off the Mitsubishi photographic paper it was selling as the product
of another company. Solid Triangle in fact admitted that the goods Sanly Corporation sold were genuine Mitsubishi
photographic paper.
The trade mark law allows the parallel importation of drugs and medical goods, but the goods are subject to the
requirements of the Food, Drug and Cosmetics Law before they can be sold to the public. Although imported drugs are
genuine, it is vital for them to comply with these requirements, particularly registration with the Bureau of Food and
Drugs. Otherwise they cannot be sold to consumers. The Special Law on Counterfeit Drugs, Republic Act 8203,
classifies as counterfeit an unregistered imported drug.
Introduction
A "trademark" is defined under R.A. 166, the Trademark Law3, as including "any word, name, symbol, emblem,

sign or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and
distinguish them from those manufactured, sold or dealt in by others." This definition has been simplified in R.A. No.
8293, the Intellectual Property Code of the Philippines4, which defines a "trademark" as "any visible sign capable of
distinguishing goods." In Philippine jurisprudence, the function of a trademark is to point out distinctly the origin or
ownership of the goods to which it is affixed; to secure to him, who has been instrumental in bringing into the market a
superior article of merchandise, the fruit of his industry and skill; to assure the public that they are procuring the
genuine article; to prevent fraud and imposition; and to protect the manufacturer against substitution and sale of an
inferior and different article as his product.5
Modern authorities on trademark law view trademarks as performing three distinct functions: (1) they indicate origin
or ownership of the articles to which they are attached; (2) they guarantee that those articles come up to a certain
standard of quality; and (3) they advertise the articles they symbolize.6
Today, the trademark is not merely a symbol of origin and goodwill; it is often the most effective agent for the actual
creation and protection of goodwill. It imprints upon the public mind an anonymous and impersonal guaranty of
satisfaction, creating a desire for further satisfaction. In other words, the mark actually sells the goods. The mark has
become the "silent salesman," the conduit through which direct contact between the trademark owner and the
consumer is assured. It has invaded popular culture in ways never anticipated that it has become a more convincing
selling point than even the quality of the article to which it refers. In the last half century, the unparalleled growth of
industry and the rapid development of communications technology have enabled trademarks, tradenames and other
distinctive signs of a product to penetrate regions where the owner does not actually manufacture or sell the product
itself. Goodwill is no longer confined to the territory of actual market penetration; it extends to zones where the
marked article has been fixed in the public mind through advertising. Whether in the print, broadcast or electronic
communications medium, particularly on the Internet, advertising has paved the way for growth and expansion of the
product by creating and earning a reputation that crosses over borders, virtually turning the whole world into one vast
marketplace.7
Brief History
Symbols have been used to identify the ownership or origin of articles for several centuries. As early as 5,000 B.C.,
markings on pottery have been found by archaeologists. Cave drawings in southwestern Europe show bison with
symbols on their flanks. Archaeological discoveries of ancient Greek and Roman inscriptions on sculptural works,
paintings, vases, precious stones, glassworks, bricks, etc. reveal some features which are thought to be marks or
symbols. These marks were affixed by the creator or maker of the article, or by public authorities as indicators for the
payment of tax, for disclosing state monopoly, or devices for the settlement of accounts between an entrepreneur and
his workmen.8
In the Middle Ages, the use of many kinds of marks on a variety of goods was commonplace. Fifteenth century
England saw the compulsory use of identifying marks in certain trades. There were the baker's mark on bread,
bottlemaker's marks, smith's marks, tanner's marks, watermarks on paper, etc. Every guild had its own mark and every
master belonging to it had a special mark of his own. The marks were not trademarks but police marks compulsorily
imposed by the sovereign to let the public know that the goods were not "foreign" goods smuggled into an area where
the guild had a monopoly, as well as to aid in tracing defective work or poor craftsmanship to the artisan. For a similar
reason, merchants also used merchants' marks. Merchants dealt in goods acquired from many sources and the marks
enabled them to identify and reclaim their goods upon recovery after shipwreck or piracy.9
With constant use, the mark acquired popularity and became voluntarily adopted. It was not intended to create or
continue monopoly but to give the customer an index or guarantee of quality. It was in the late 18th century when the
industrial revolution gave rise to mass production and distribution of consumer goods that the mark became an
important instrumentality of trade and commerce. By this time, trademarks did not merely identify the goods; they also
indicated the goods to be of satisfactory quality, and thereby stimulated further purchases by the consuming public.
Eventually, they came to symbolize the goodwill and business reputation of the owner of the product and became a
property right protected by law. The common law developed the doctrine of trademarks and tradenames "to prevent a
person from palming off his goods as another's, from getting another's business or injuring his reputation by unfair
means, and, from defrauding the public." Subsequently, England and the United States enacted national legislation on
trademarks as part of the law regulating unfair trade. It became the right of the trademark owner to exclude others from
the use of his mark, or of a confusingly similar mark where confusion resulted in diversion of trade or financial injury.
At the same time, the trademark served as a warning against the imitation or faking of products to prevent the
imposition of fraud upon the public.10
The Philippine Experience
In the Philippines, trademark law has undergone four (4) major stages. The earliest law that recognized trademark
rights was that of Queen Ma. Cristina of Spain who promulgated on 26 October 1888 a trademark law for the
Philippines. This first law was based on registration. Thus, trademarks rights belong to the person who was to register
it first. Upon accession of the Philippines to the United States, the Philippine Commission passed on 6 March 1903 Act
No. 666 or the Trademark and Trade Name Law of the Philippine Islands. Act 666 abandoned the registration system
under the 1888 trademark law. Instead, Act 666 provided actual use of the mark as the basis of acquiring ownership
and exclusive rights to the mark. The Philippines being a territory of the United States, adopted principles under Act
666 that were basically the same as the U.S. trademark law. Philippine courts relied heavily on U.S. jurisprudence.
After the Philippines gained its independence in 1946, Republic Act 166 took effect, repealing Act 666. R.A. 166
retained the first-to-use system of trademark ownership. While developing its own peculiar course of jurisprudence,
the Philippine courts continued, and will continue, to rely on U.S. jurisprudence.

International Treaties

Meanwhile, on 27 September 1965, the Philippines adhered to the Lisbon Act of the Paris Convention for the
Protection of Industrial Property ("Paris Convention"). The Paris Convention is a multilateral treaty that seeks to
protect industrial property consisting, among others of trademarks, service marks, trade names and indications of
source or appellations of origin, and at the same time repress unfair competition. It is essentially a compact among
various countries which, as members of the Union, have pledged to accord citizens of the other member countries
trademark and other rights comparable to those accorded their own citizens by their domestic laws for an effective
protection against unfair competition. Foreign nationals are to be given the same treatment in each of the member
countries as that country makes available to its own citizens. Thus, nationals of each of the member countries are
assured of certain minimum international protection of their industrial property. For example, the Paris Convention
provides for the protection of internationally well-known marks. It also provides for applications claiming the priority
date of an earlier filed application in member countries.
In 1995, the Philippines adhered to the Agreement establishing the World Trade Organization ("WTO"). The WTO is a
common institutional framework for the conduct of trade relations among its members in matters related to the
multilateral and plurilateral trade agreements annexed to the WTO Agreement. The WTO framework ensures a "single
undertaking approach" to the administration and operation of all agreements and arrangements attached to the WTO
Agreement. Among those annexed is the Agreement on Trade-Related Aspects of Intellectual Property Rights
("TRIPs"). Members to this Agreement "desire to reduce distortions and impediments to international trade, taking into
account the need to promote effective and adequate protection of intellectual property rights, and to ensure that
measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade."
To fulfill these objectives, the members have agreed to adhere to minimum standards of protection set by several
Conventions, including the Paris Convention (1967), as revised in Stockholm on July 14, 1967.
The TRIPs Agreement seeks to grant adequate protection of intellectual property rights by creating a favorable
economic environment to encourage the inflow of foreign investments, and strengthening the multi-lateral trading
system to bring about economic, cultural and technological independence.

I. LEGISLATION
Trademark Law Under Republic Act 8293
On 1 January 1998, Republic Act 8293, known as the Intellectual Property Code of the Philippines, took effect,
repealing, among others, the old Trademark Law, R.A. 166. To comply with the minimum requirements of the WTO,
the Intellectual Property Code adopted several provisions of the WTO TRIPs Agreement.

System of Registration
Under R.A. 166, ownership of a mark is acquired through actual use of the mark in commerce in the Philippines. This
is the "first-to-use" system of trademark ownership similar to the system in the U.S. Under R.A. 8293, the Intellectual
Property Code abandoned the first-to-use system of trademark ownership and adopts the "first-to-file" system. The
rights to a mark11 are acquired by registration. Priority is given to the first to apply for registration.
Intent-to-Use Applications
The first-to-file system of ownership paved the way to the so-called "intent-to-use" applications adopted in all other
jurisdictions.12 However, the applicants in intent-to-use applications are required to file a declaration of actual use 13 of
the mark in Philippine commerce within 3 years from filing of the application. This requirement is meant to avoid
protecting deadwood or paper registrations, and preventing the applicant from keeping the mark forever, depriving
other legitimate businesses from the opportunity to use the mark.
The Register
The Intellectual Property Code provides for only one register. A second, or Supplemental Register, is no longer
maintained. Under the R.A. 166, there was a Principal Register and a Supplemental Register. Generally, marks that
were not registrable on the Principal Register for being merely descriptive of the goods were allowed registration on
the Supplemental Register.14
What are Registrable Marks
As stated above, a mark is defined as any visible sign capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise.
Types of marks.
Marks fall within four categories along a spectrum, from the most protectable to the unprotectable:
1.

arbitrary or fanciful marks;

2.

suggestive marks;

3.

descriptive marks; and

4.

generic marks.

Arbitrary marks consist of common words which, when applied to certain goods or services, neither suggest nor
describe any characteristic of those goods or services. Good examples of arbitrary marks are APPLE for computers
and CAMEL for cigarettes.
Fanciful marks are "coined" words invented solely for the purpose of functioning as a mark. Archaic or obsolete terms
may also function as fanciful marks. Examples of fanciful marks include KODAK for photographic supplies, EXXON
for petroleum products and CLOROX for bleaching products.
Arbitrary and fanciful marks are considered "inherently distinctive" and are eligible for registration and protection.
They are commonly considered "strong" marks.
Suggestive marks are those that suggest some quality of ingredient of the goods or services to which the marks are
applied. Suggestive marks may best be described as "subtly descriptive" and are entitled to protection without proof of
distinctiveness. Examples of suggestive marks are MR. CLEAN for laundry soap, CLOSE-UP for toothpaste and
GREYHOUND for bus lines.
Descriptive Marks. Descriptive marks describe some characteristic or alleged merit of a product or service. Because
descriptive terms may be truthfully applied to the goods and services and of many sellers, they are not entitled to
protection unless they have acquired "secondary meaning" in the marketplace. A descriptive mark acquires secondary
meaning when in addition to its literal or dictionary meaning, it connotes to the public a product from a unique source.
Examples of descriptive marks are MATIBAY for shoes, PURE for purified drinking water and YELLOW PAGES for
the classified telephone directory.
Generic Marks. A generic term tells what a product or service is, rather than indicating the source of a product; thus, it
must remain in the public domain and can never function as a trademark. Examples of generic terms include
ORANGE for oranges and APPLE for apples.

Abandonment of a Mark
Care must be taken to ensure that a distinctive mark capable of protection does not become the common name by
which the whole product category is known and thereby fall into generic use. Sellers of new and unfamiliar products
should keep a watchful eye on the public's usage to see that a given trademark is not used as the generic name of the
new product itself. If the product is new, the seller should give the public a generic name to apply to the product so that
the seller's mark will not be adopted as the generic name. (e.g. FRISBEE "flying dish" and XEROX15 for photocopying
machine) Other ways to protect against generic use of a mark include: (1) registration coupled with use of the
trademark notice symbol ; (2) use of the work "brand" between the mark and the generic name (e.g. "Scotch brand
tape"); (3) use of the mark only as an adjective, never as a verb or noun; and (4) positive education advertising.
Valuable marks which have been lost through generic slippage include: "shredded wheat," "yo-yo" and "escalator."

Selection and Preclearance of a Mark

Selection. Companies are encouraged to work with their trademark attorneys when selecting and developing a mark.
Input by an attorney during the initial selection process can avoid potential problems and lead to the selection of the
strongest possible mark consistent with the business considerations.
As discussed above, the strongest marks are those which are arbitrary or fanciful. However, businessmen frequently
prefer marks which describe the particular business or product in question. This natural tension must be recognized
and dealt with in the selection process.
Certain marks are not entitled to registration. These are:

immoral, deceptive or scandalous matter; matter which disparage or falsely suggest a connection with
persons, living or dead, institutions, beliefs or national symbols, or which bring them into contempt or
disrepute;

flag or coat of arms or other insignia of the Philippines or any of its political subdivisions, or any foreign
nation, or any simulation thereof;

name, portrait or signature of a particular living person except by his written consent, or name, signature or
portrait of a deceased President, during the life of his widow, if any, except by written consent of widow;

identical with a registered trademark belonging to a different proprietor or a mark with an earlier filing or
priority date, in respect of:

the same goods or services;

closely related goods or services; or

if it nearly resembles such a mark as to be likely to deceive or cause confusion identical with, or confusingly
similar to, or constitutes a translation of a mark which is considered by competent authority of the Philippines
to be well-known internationally and in the Philippines, whether or not it is registered here, as being already
the mark of a person other than the applicant, and used for identical or similar goods or services identical
with, or confusingly similar to, or constitutes a translation of a mark considered well-known which is
registered in the Philippines with respect to goods or services which are not similar to those with respect to
which registration is applied provided that use of the mark in relation to those goods and services would
indicate a connection between those goods or services, and the owner of the registered mark and the interests
of the owner of the registered mark are likely to be damaged by such use likely to mislead the public,
particularly as to the nature, quality, characteristics or geographical origin of the goods or services consists
exclusively of signs that are generic for the goods or services that they seek to identify.

Preclearance. After selecting a potential mark, the company should ascertain whether the mark is available for
adoption. The objective is to avoid the adoption and use of a mark that is confusingly similar to a prior registered,
allowed or applied-for mark, or one that has been previously used by but not registered with the Intellectual Property
Office16. Even if a company is already using a mark, a search may still be in order to assess the rights and risks
associated with its continued use.
To determine whether a mark is available, a search of the records of the Intellectual Property Office should be
conducted at the earliest possible date. The search will take into account phonetically similar marks for similar goods
and services. Usually, in addition to the Intellectual Property Office files, a formal search will include a review of
general directories, trade directories and other sources. For a highly visible, nationwide mark adoption, the
preclearance may include telephone directory searches, private investigators and other, often expensive, techniques.
When a search yields potential problems, several courses of action are available. One may choose not to go forward
with a proposed mark, to discontinue a mark presently in use, to obtain a third party's consent to the use of the mark or
to purchase rights to the mark. The counsel can conduct investigations, obtain catalogues, advertising and product
samples, or contact the owners of problem marks to assist the client in selecting the best course of action.

Term of Registration and Maintenance of Marks

Trademark registration is valid for 10 years from date of issue, provided, the registrant files with the Intellectual
Property Office an affidavit of use/non-use within 1 year following the 5th anniversary of the effective date of the
registration or renewal registration. The registration is renewable at the end of each 10th year so long as the mark is
still in commercial use.
The registrant must also use the mark for an uninterrupted period of three years. Otherwise, the mark is presumed
abandoned and the registration will be cancelled.

Domain name or .com Trademarks

The Intellectual Property Office now accepts applications for the registration of domain names as service marks. In
fact, domain name applications are accorded some degree of importance as "priority applications" so that the
registration process can be expedited.17 The same rules on registrability of marks apply in domain name applications
considered as service marks.

II. JURISPRUDENCE
A. Confusing decisions on "Confusing Similarity"
Wholistic Test versus Dominancy Test. Under the Wholistic18 Test, trademarks must be considered in their entirety as
they appear in their respective labels. On the other hand, in the dominant feature test, courts compare the dominant
features of the contending marks to find infringement.
Del Monte Corp. v. CA, GR No. 78325, 25 January 1990

Facts: Petitioners Del Monte Corporation, et. al. question the decision of the Court of Appeals upholding the dismissal
by the trial court of their complaint against Sunshine Sauce Manufacturing Industries for trademark infringement and
unfair competition.
Del Monte is the registrant of the Del Monte bottle configuration in the supplemental register. Del Monte also has two
registration certificates in the principal register for its trademark "DEL MONTE" and its logo. Sunshine uses Del
Monte's bottle, which it buys from junk shops, for its catsup and uses a logo, which is registered in the supplemental
register, allegedly confusingly similar to the Del Monte logo.
Ruling: The Court ruled that a side-by-side comparison is not the final test of similarity. The question is not whether
the two articles are distinguishable by their label when set side by side but whether the general confusion made by the
article upon the eye of the casual purchaser who is unsuspicious and off his guard, is such as to likely result in his
confounding it with the original. The marks must be considered as a whole, not dissected. If the buyer is deceived, it is
attributable to the marks as a totality. Factors such as age, training and education of the usual purchaser, the nature and
cost of the article, whether the article is bought for immediate consumption and also the conditions under which it is
usually purchased are considered.
The Court found the Sunshine label to be a colorable imitation of the Del Monte label and that infringement exists.

Asia Brewery v. CA and San Miguel GR No. , 5 July 1993

Facts: San Miguel Corporation ("SMC") filed a complaint against Asia Brewery Inc. ("ABI") for trademark
infringement and unfair competition for ABI's BEER PALE PILSEN or BEER NA BEER product which competed
with SMC's PALE PILSEN.
The trial court dismissed the complaint. The Court of Appeals reversed the trial court's ruling and ruled that there was
infringement of trademark and unfair competition.
Issue: Whether ABI infringes SMC's trademark: San Miguel Pale Pilsen with Rectangular Hops and Malt Design and
thereby commits unfair competition against the latter.
Ruling: The Court ruled that infringement is determined by the "test of dominancy" rather than by differences or
variations in the details of one trademark and of another. "It has been consistently held that the question of
infringement of a trademark is determined by the test of dominancy. Similarity in size, form and color, while relevant
is not conclusive. If the competing mark contains the main or essential feature or dominant features of another, and
confusion and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; nor is it
necessary that the infringing label should suggest an effort to imitate. The question at issue in cases of infringement of
trademark is whether the use of the marks involved would be likely to cause confusion or mistake in the mind of the
public or deceive purchasers."
There is hardly any dispute that the dominant feature of SMC's trademark is the name of the product, San Miguel Pale
Pilsen, written in Gothic letters with elaborate serifs at the beginning and end of the letters "S" and "M" on an amber
background across the upper portion of the rectangular design.
On the other hand, the dominant feature of ABI's trademark is the name: Beer Pale Pilsen, with the word Beer written
in large letters, larger than any of the letters found in the SMC label.

The Supreme Court gave the following reasons:

1.

The word "beer" does not appear in SMC's mark nor does the word "San Miguel" appear in ABI's mark.
Hence, there is absolutely no similarity in the dominant features of both trademarks - neither in sound,
spelling or appearance can Beer Pale Pilsen be confused with San Miguel Pale Pilsen.

2.

There were also dissimilarities in the trade dress of the two products.

3.

There is a substantial price difference (P=4.25 to P= 7.00).

4.

ABI's name appeared on beer bottle; thus, no intention to pass off (unfair competition).

5.

The use of words "Pale Pilsen" is not infringement because it is generic.

6.

No unfair competition in the use of the steinie bottle since this is a standard type of bottle used for beers.

7.

Although the shape of bottle and labels were similar, what is important is the name of the product written on
the label of the bottle.

The Court also ruled that the ABI decision did not diminish the Del Monte decision (181 SCRA 410) since catsup is a
more common household item, and the rules are applied more strictly.
Dissent: The present ponencia stresses the specific similarities and differences of the two products to support the
conclusion that there is no infringement of trademarks or unfair competition. That [dominancy] test was rejected in the
ponencia in Del Monte Corporation vs. Court of Appeals, 181 SCRA 410.
Comment: In the Del Monte case, the Supreme Court applied the Holistic Test approach while in the San Miguel case,
the Supreme Court applied the dominancy test and the Court arrived at different conclusions. Do the two tests result in
different results?
The ultimate issue in determining trademark infringement is whether, from his point of view, the relevant consumer
would likely be confused by the similarity between the marks or labels under actual market conditions. This is the
"likelihood of confusion" test that requires a balancing of factors along a spectrum. Thus, on one end of the spectrum,
the use of an identical sign for identical goods or services, a likelihood of confusion is presumed. 19 On the other end of
the spectrum, the use of a slightly similar mark for unrelated goods or services should not result in finding likelihood
of confusion. Along the spectrum, courts should balance other factors, such as: (1) the strength of the plaintiff's mark,
(2) the degree of similarity between the 2 contending marks as they are encountered in the market place, (3) the
proximity of the products or services, (4) the likelihood that plaintiff will bridge the gap, (5) evidence of actual
confusion, (6) defendant's good faith in adopting the mark, (7) the quality of defendant's products, and (8) the
sophistication of buyers. 20
From another perspective, it may also be proper to distinguish between a case for opposition or cancellation filed with
the Intellectual Property Office where only the registrability of a mark is at issue and therefore only the marks are to be
considered, and a case pending before the trial court for trademark infringement where all circumstances surrounding
the actual use of the marks should be considered. The distinction becomes important in cases of intent-to-use
applications and the applicants have yet to start using the mark on its labels or goods. A further distinction may also be
made between a trademark infringement case where only the use of the particular marks are at issue, and a case for
unfair competition case where the general appearance of the products are at issue.

Converse Rubber Corp. v. Universal Rubber Products Industries, 147 SCRA 154 (8 January 1987)
Facts: Universal Rubber Products filed an application with the Bureau of Patents, Trademarks and Technology
Transfer for registration of the trademark "UNIVERSAL CONVERSE & DEVICE" for rubber shoes and rubber
slippers. Converse Rubber filed its opposition on grounds that:
a.

The trademark sought to be registered is confusingly similar to the word "CONVERSE" which is part of its
corporate name as to likely deceive purchasers to the extent that the products may be mistaken by the unwary
public to be manufactured by Converse Rubber.

b.

The registration of the trademark will cause great and irreparable injury to the reputation and goodwill of
Converse Rubber in the Philippines.

Petitioner's lone witness testified that she had been selling CONVERSE rubber shoes in the local market since 1956
and that sales in her stores averaged twelve to twenty pairs a month.
The BPTTT denied the opposition.
Ruling: It is evident that the word "CONVERSE" is the dominant word in the corporate name "CONVERSE RUBBER
CORPORATION".
A foreign corporation has a right to maintain an action in the Philippines even if it is not licensed to do business and is
not actually doing business on its own. This is in consonance with the Paris Convention.
Furthermore, sales of 12 to 20 pairs a month of rubber shoes cannot be considered insignificant, considering that they
appear to be of expensive quality, which not too many basketball players can afford to buy. Any sale made by a
legitimate trader in his store is a commercial act establishing trademark rights since such sales are made in due course
of business to the general public and not limited to a special class of customers.

Emerald Garment Manufacturing Corp. v. Court of Appeals

GR No. , 29 December 1995
Facts: The petitioner, Emerald Garment Manufacturing Corporation, is seeking to reverse the decision of the Court of
Appeals in which the court found that the petitioner's trademark "STYLISTIC MR. LEE" to be confusingly similar to
that of the private respondent, H.D. Lee. H.D. Lees' trademarks include "LEE," "LEE RIDERS," "LEESURES," and
"LEE LEENS."
Issue: Whether the petitioner's trademark "STYLISTIC MR. LEE" is confusingly similar to private respondent's earlier
registered trademarks "LEE," "LEE RIDERS," "LEESURES," and "LEE LEENS" such that the trademark
"STYLISTIC MR. LEE" is an infringement of the earlier registered trademarks?

Held: The court ruled that infringement of a trademark occurs where the mark involved will likely confuse the public
or deceive ordinary purchasers into thinking it is another mark. The Supreme Court found that the petitioner's
trademark is not similar to that of the respondent's because of several factors.
a.

Because jeans, the products involved, are expensive, an average buyer will be more cautious in buying this
product.

b.

The average Filipino consumers buy their jeans by the brand name and therefore, are more familiar with their
preference.

c.

An ordinary purchaser is one who is accustomed to buy and becomes more knowledgeable with the goods
involved.

d.

It is highly unlikely that the public would assume that "STYLISTIC MR. LEE" is a variation of "LEE
RIDERS," "LEESURES," and "LEE LEENS" because of respondent's standard format of starting with
"LEE."

e.

The name Lee is allowed to be used by more than one person or company because it is a surname and
therefore, respondent cannot acquire exclusive ownership over the term.

Comment: The Supreme Court, in the case of Emerald Garment v. Court of Appeals, et. al. ("Lee case"), correctly
observed that "[i]n the history of trademark cases in the Philippines, particularly in ascertaining whether one trademark
is confusingly similar to or is a colorable imitation of another, no set rules can be deduced. Each case must be decided
on its own merits."
However, the Supreme Court arrived at different, if not opposing, conclusions in the Converse and Lee cases. In the
Lee case, it is clear that LEE is the dominant feature of the mark. But the Supreme Court, applying the holistic test,
said: "Petitioner's trademark is the whole "STYLISTIC MR. LEE." The Supreme Court said: "Although on its label the
word "LEE" is prominent, the trademark should be considered as a whole and not piecemeal. The dissimilarities
between the two marks become conspicuous, noticeable and substantial enough to matter especially in the light of the
following variables that must be factored in. First, the products involved in the case at bar are, in the main, various
kinds of jeans. These are not your ordinary household items like catsup, soy sauce or soap which are of minimal cost.
Maong pants or jeans are not inexpensive. Accordingly, the casual buyer is predisposed to be more cautious and
discriminating in and would prefer to mull over his purchase. Confusion and deception, then, is less likely." But the
same factors may very well be applied in the Converse case, yet the Court arrived at a different conclusion.
The Lee case originated from the Trademark Office on the issue of registrability of STYLISTIC MR. LEE. Are the
factors relied upon by the Court relevant in a registrability issue under the first-to-file system of trademark ownership?
Are beer (in the SMC case) and jeans (in the Lee case) on one hand and shoes (in the Converse case) and catsup (in the
Del Monte case) on the other hand different such that the sophistication of the relevant buyers or consumers are also
different?

Interesting Pending Case: McDonalds Corporation v. Big Mak Burger, C.A. G.R. No. )
Is the service mark BIG MAK for fastfood restaurant offering foods including burgers confusingly similar to the
trademark "BIG MAC" for burgers?
Branch 137 of the Regional Trial Court of Makati said yes. According to the trial court, a person who is hungry and
wants to eat a hamburger sandwich may not be discriminating enough to look for a McDonalds restaurant and buy a
"Big Mac hamburger." Once he sees a stall selling hamburger sandwich, in all likelihood, he will dip into his pocket
and order a Big Mak hamburger sandwich.
On appeal, the Court of Appeals reversed the decision of the trial court, ruling that no colorable imitation exists. The
CA ruled:
A careful comparison of the way the trademark BIG MAC is being used by plaintiffs-appellee and the corporate name
L.C. Big Mak Burger, Inc. by defendant-appellants, would readily reveal that no confusion could take place, or that the
ordinary purchasers would be misled by it. As pointed out by defendant-appellants, the plaintiffs-appellees trademark
is used to designate only one product, a double decker sandwich sold in a styrofoam box with the "McDonalds" logo.
On the other hand, what the defendant-appellant corporation is using is not a trademark for its food product but a
business or corporate name. They use the L.C. Big Mak Burger Inc. in their restaurant business which serves
diversified food items such as hotdog, ham, fish burger, and hamburger. Secondly, defendants-appellants' corporate
name or business name appearing in the food packages and signages are written in silhouette red-orange letters with
the "b" and "m" in upper case letters. Above the words "Big Mak" are the upper case letters "L.C." Below the words
"Big Mak" are the words "Burger, Inc." spelled out in upper case letters. Furthermore, said corporate or business name
appearing in such food packages and signages is always accompanied by the company mascot, a young chubby boy
named Maky who wears a red T-shirt with the upper case "m" appearing therein and a blue garment. Finally, the

defendants-appellants food packages are made of plastic material.

xxx

In the case at bar, it is readily apparent to the naked eye that there appears a vast difference in the appearance of the
product and the manner the tradename "Big Mak" is being used and presented to the public. As earlier noted, there are
glaring dissimilarities between plaintiffs-appellees' trademark and defendants-appellants' corporate name. Plaintiffsappellees' product carrying the trademark "BIG MAC" is a double-decker sandwich (depicted in the tray mat
containing photographs of the various food products) sold in a styrofoam box with the "McDonalds" logo and
trademark in red, black capital letters printed thereon, at a price which is more expensive than the defendantsappellants comparable food products. In order to buy a "BIG MAC," a customer needs to visit an air-conditioned
"McDonalds" restaurant usually located in a nearby commercial center, advertised and identified by its logo - the
umbrella "M", and its mascot - "Ronald McDonald". A typical McDonalds restaurant boasts of a playground for kids, a
second floor to accommodate additional customer, a drive-thru to allow customers with cars to make orders without
alighting from their vehicles, the interiors of the buildings are well lighted, distinctly decorated and painted with pastel
colors. In buying a "BIG MAC" it is necessary to specify its trademark. Thus, a customer needs to look for a
"McDonalds" and enter it first before he can find a hamburger sandwich which carry the mark "Big Mac". On the other
hand, defendants-appellants sell their goods through snack vans in strategic locations and caters to class "C & D"
customers.
Comment: The case is now on appeal at the Supreme Court. It would be interesting to know how the Supreme Court
will rule in the McDonalds case in view of the seeming inconsistencies in the rulings of the Court in the Del Monte
and San Miguel cases and in the Converse and Lee cases. Will burgers be a class of its own?

B. On Related Goods Doctrine

Faberge Incorporated v. IAC and Co Beng Kay, GR No. 71189, 4 November 1992
Facts: The Director of Patents allowed Co Beng Kay to register the trademark "BRUTE" for briefs despite petitioner's
opposition grounded on similarity of said trademark with petitioner's own symbol "BRUT" which it previously
registered for after-shave lotion, shaving cream, deodorant, talcum powder, and toilet soap. Both marks are similar in
appearance, sound and style of presentation.
Issue: Are briefs on one hand and aftershave lotion, shaving cream, deodorant, talcum powder and toilet soap on the
other hand, related goods?
Ruling: The Court ruled that the private respondent may be permitted to register the trademark "BRUTE" for briefs.
Petitioner has not ventured into the production of briefs, an item not listed in its certificate of registration. One who
has adopted and used a trademark on his goods does not prevent the adoption and use of the same trademark by others
for products which are of a different description.
Comment: As a result of this decision, Article 138 of R.A. 8293 now provides that a "certificate of registration of a
mark shall be prima facie evidence ofthe registrant's exclusive right to use the same in connection with the goods or
service and those that are related thereto specified in the certificate." Under the old trademark law, the phrase "and
those that are related thereto" is not found.
C. On Preliminary Injunction
Developers Group of Companies, Inc. v. CA, GR No. , 8 March 1993
Facts: Petitioner, the trademark registrant for "Shangri-la" and "S-logo", filed a case for infringement and damages.
The marks were registered in the principal register on 31 May 1983. On the hand, Shangri-La International Hotel and
Management Ltd. claimed that is was the legal and beneficial owner of the mark and first used it in 1962. It also
alleged that before the complaint was filed, it had filed a cancellation action against Developers trademark
registrations.
The lower court granted the injunction which was reversed by the Court of Appeals.
Issue: Whether petitioner was entitled to the writ of preliminary injunction issued by the trial court pending trial on the
merits, of the charge of infringement against private respondent.
Held: The Supreme Court ruled that the right claimed by the plaintiff as its basis for asking for injunctive relief is far
from clear. The prima facie validity of its registration has been put in serious question by the cancellation cases filed
by Shangri-La with the Bureau of Patents, Trademarks and Technology Transfer 3 years ahead of the complaint.
Furthermore, Developers has not adduced any evidence of injury, either actual or imminent, resulting from the acts
complained of against Shangri-La. Hence, preliminary injunction denied.
Comment: It is difficult to secure a writ of preliminary injunction in trademark cases. The showing of irreparable harm
has always been the problem. In one case,21 the Supreme Court refused to grant the writ of preliminary injunction
because the petitioners failed to prove actual use of the mark in the Philippines. According to the Court, petitioner's
right or title cannot be made to rest solely on the certificate of trademark registration in the Philippines. Is this still a

good law in light of the shift from first-to-use system to the first-to-file system of trademark ownership? How about
the recent pronouncement of Justice Panganiban in Mirpuri v. Court of Appeals 22 that new technology may affect the
goodwill and market penetration of goods not available locally?

D. On Jurisdiction & Prejudicial Question

Shangri-La International Hotel vs. Court of Appeals, G.R. No. , June 21, 2001 and G.R. No. , June 21, 2001.
Facts: On June 21, 1988, the Shangri-La International Hotel et. al. ("Shangri-La Group"), filed with the Bureau of
Patents, Trademarks and Technology Transfer ("BPTTT") a petition praying for the cancellation of the registration of
the "Shangri-La" mark and "S" device/logo issued to the Developers Group of Companies, Inc., on the ground that the
same was illegally and fraudulently obtained and appropriated for the latter's restaurant business. The Shangri-La
Group alleged that it is the legal and beneficial owners of the subject mark and logo; that it has been using the said
mark and logo for its corporate affairs and business since March 1962 and caused the same to be specially designed for
their international hotels in 1975, much earlier than the alleged first use thereof by the Developers Group in 1982.
Likewise, the Shangri-La Group filed with the BPTTT its own application for registration of the subject mark and
logo. The Developers Group filed an opposition to the application.
Almost three (3) years later, or on April 15, 1991, the Developers Group instituted with the Regional Trial Court of
Quezon City, Branch 99, a complaint for infringement and damages with prayer for injunction against the Shangri-La
Group.
On January 8, 1992, the Shangri-La Group moved for the suspension of the proceedings in the infringement case on
account of the pendency of the administrative proceedings before the BPTTT. The trial court denied the motion to
suspend. The Shangri-La Group then filed a petition for certiorari before the Court of Appeals. On February 15, 1993,
the Court of Appeals rendered its decision dismissing the petition for certiorari.
Issue: The core issue in this case is simply whether, despite the institution of an Inter Partes case for cancellation of a
mark with the BPTTT (now the Bureau of Legal Affairs, Intellectual Property Office) by one party, the adverse party
can file a subsequent action for infringement with the regular courts of justice in connection with the same registered
mark.
Ruling: Section 151.2 of Republic Act No. 8293, otherwise known as the Intellectual Property Code, provides, as
follows SECTION 151.2. Notwithstanding the foregoing provisions, the court or the administrative agency vested with
jurisdiction to hear and adjudicate any action to enforce the rights to a registered mark shall likewise exercise
jurisdiction to determine whether the registration of said mark may be cancelled in accordance with this Act. The filing
of a suit to enforce the registered mark with the proper court or agency shall exclude any other court or agency from
assuming jurisdiction over a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing
of petition to cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial question that must be
resolved before an action to enforce the rights to same registered mark may be decided.
Similarly, Rule 8, Section 7, of the Regulations on Inter Partes Proceedings, provides to wit:
SECTION 7. Effect of filing of a suit before the Bureau or with the proper court. - The filing of a suit to enforce the
registered mark with the proper court or Bureau shall exclude any other court or agency from assuming jurisdiction
over a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing of petition to cancel the
mark with the Bureau shall not constitute a prejudicial question that must be resolved before an action to enforce the
rights to same registered mark may be decided.
Hence, as applied in the case at bar, the earlier institution of an Inter Partes Case by the Shangri-La Group for the
cancellation of the "Shangri-La" mark and "S" device/logo with the BPTTT cannot effectively bar the subsequent
filing of an infringement case by registrant Developers Group. The law and the rules are explicit.
The rationale is plain: Certificate of Registration No. 31904, upon which the infringement case is based, remains valid
and subsisting for as long as it has not been cancelled by the Bureau or by an infringement court. As such, Developers
Group's Certificate of Registration in the principal register continues as "prima facie evidence of the validity of the
registration, the registrant's ownership of the mark or trade-name, and of the registrant's exclusive right to use the same
in connection with the goods, business or services specified in the certificate." Since the certificate still subsists,
Developers Group may thus file a corresponding infringement suit and recover damages from any person who
infringes upon the former's rights.
Furthermore, the issue raised before the BPTTT is quite different from that raised in the trial court, said the Court. The
issue raised before the BPTTT was whether the mark registered by Developers Group is subject to cancellation, as the
Shangri-La Group claims prior ownership of the disputed mark. On the other hand, the issue raised before the trial
court was whether the Shangri-La Group infringed upon the rights of Developers Group within the contemplation of
Section 22 of Republic Act 166.

Comment:

(1) It is interesting to note that the petition for cancellation was filed three years ahead of the infringement suit. In the
earlier Shangri-La case involving the same parties on the matter of injunction, the Supreme Court ruled, "[t]he prima
facie validity of its registration has been put in serious question by the cancellation cases filed by Shangri-La with the
BPTTT 3 years ahead of the complaint." Then the Court apparently reversed itself saying that the prima facie validity
of the registration remains in effect "for as long as it has not been cancelled." Has the meaning of the term prima facie
got lost somewhere?
(2) The Shangri-La case appears to be a dangerous precedent. If the courts find Shangri-La guilty of trademark
infringement, can the Intellectual Property Office still cancel the registration of Developers Group on the basis of
evidence presented before it? The Supreme Court was quick to avoid this situation by ordering the then Bureau of
Patents to suspend, but not to stop, the cancellation proceedings. 23
(3) Whatever happened to the rule on primary jurisdiction and the rule on agency expertise? This ruling appears to be
inconsistent with the ruling in Amigo Manufacturing v. Cluett Peabody24 where the Court said that administrative
agencies' (IPO in this case) findings of fact in matters falling under their jurisdiction are generally accorded great
respect, it not finality. That's consistency and predictability for us.
III. THE INTERNET & DOMAIN NAMES
The Internet
What is known as the Internet, or the Net, was set up in 1969 to connect computers for defense purposes. Later, it was
expanded to include, under the supervision of the National Science Foundation ("NSF"), the research community. NSF
was first authorized to permit commercial activities in 1992. Soon thereafter, the Internet became the world's largest
computer network, containing millions of "host" computers. Some economic groups predict that business to business
e-commerce (or B2B), which accounted for $145 billion in 1999, will account for $7.29 trillion worldwide by 2004.
Traffic on the Internet doubles every 100 days, with 1 billion people expected to be connected to the Internet by 2005.
The Internet is here to stay.25

Domain Names 26
Alphanumeric addresses or "domain names" serve two functions. First, a domain name represents the address of a
computer on the Internet, so that every computer connected to this "network of networks" can communicate with every
other computer. Each computer connected to the Internet is assigned a unique numeric address or Internet Protocol
("IP") number consisting of a string of numbers, such as 189.45.231.67. Because these numeric addresses are difficult
for people to remember, Internet engineers created an alphanumeric system called the Domain Name System, which
relates these difficult-to-remember IP numbers to easy-to-remember domain names chosen by the registrant user. Thus,
each domain name actually represents a unique Internet numeric address.
Domain names consist of at least two parts, which are called "domain levels." Each domain level is separated by a
period, called "dot." Top-level domains or TLDs are referenced by their Internet zone designation, such as .com,
org., .net. (the generic TLDs registered by Network Solutions, Inc.("NSI")), or country code TLDs, such as .ph
(Philippines), .us (United States), .ca (Canada), and so forth. Zone designations or TLDs are located immediately to
the right of the dot. Second level domains (SLDs) are located to the immediate left of the dot. NSI only registers
SLDs, although a domain name may consist of tertiary or additional levels. Domain names may be used as addresses
for a variety of Internet communications, although e-mail and website operation are probably the most common
commercial uses. An example of a domain name would be bnlaw.com, with .com as the TLD, and "bnlaw" as the SLD;
a full e-mail address also contains one or more preceding designations that identify the specific person, function or
department within that organization, such as antonbengzon@bnlaw.com; and a website address or URL (Uniform
Resource Locator) would be, e.g.,http://www.bnlaw.com.

Domain Name as a Trademark

With the emergence of electronic commerce in the mid-1990s, the domain name acquired, at times, a second function
in addition to its Internet addressing function. It, on occasion, came to serve the same function in electronic commerce
as the trademark in more traditional modes of business. Consumers have come to depend on domain names much as
they depend on trademarks in the physical world, i.e., as the means by which they can identify the desired source of a
product or service in obtaining information and making purchasing decisions. "[A] domain name is more than a mere
Internet address. It also identifies the Internet site to those who reach it much like a company's name identifies a
specific company."27 In short, consumers frequently expect that a website or e-mail address consisting of or
encompassing a trademark used in the physical world is sponsored by or associated with the owner of that trademark.
However, there is a perceived tension between these functions. Some members of the Internet community believe that
for many, perhaps all, purposes, the domain name continues to be "merely an address" which is to be accorded no
trademark significance. Others recognize that a domain name can have trademark significance, in at least some,
perhaps many instances, although some uses of a trademark in a domain name must be regarded as protected free
speech or descriptive fair use. Trademark owners fall into the latter camp, although many differ as to the extent to
which free speech use can be accorded to use of their trademarks in domain names. But if a domain name is regarded
as serving the same function as a trademark, a further tension must be recognized between the geographically-based
trademark and the global Internet.

Notwithstanding the traditional territorial limitations of a trademark, consumers have imported their "real-world
expectations" about trademarks and their function as source indicators into the Internet, where they use domain names
as the same shorthand means of finding desired goods and services. "A website's domain name signifies its source of
origin, and is therefore an important signal to Internet users who are seeking to locate web resources." "Because of the
importance of a domain name in identifying the source of a website, many U.S. courts have held that the use of a
trademark within the domain name of a URL can constitute a trademark violation." 28

How domain names are obtained

Domain names usually are obtained by working through an Internet service provider (ISPs) that submits the electronic
application for a domain name to one or more of the approximately 240 registries worldwide. Upon obtaining the
registration in any particular registry's database, subsequent registrations of the same name will be precluded, because
each domain name represents a unique address on the Internet. Internet domain names cannot exceed 26 characters,
including the four characters used to identify the TLD (including the "dot"). Restated, an SLD in a domain name
cannot exceed 22 characters consisting only of letters, numbers or hyphens. Domain names cannot contain spaces.

Although not originally envisioned as a global TLD, .com has become the "domain of choice" for many companies,
providing an alternative to the country code TLDs. As of March 9, 1999, NSI registered its 4,000,000 domain name in
the .com, net and .org TLDs combined, with the .com TLD representing the overwhelming majority of names on the
Internet. NSI, like most registries, assigns domain names on a "first-come, first-served" basis. The current availability
of a domain name can be ascertained through NSI's WHOIS database.
Just as trademark owners register their trademarks worldwide, it also is possible to register domain names in over 240
national and quasi-national registries.4 In some of these, there are subdomains, e.g., .com.ph for a Philippine
commercial company, so there are over 400 distinct domain registration possibilities. There is substantial variation in
structure in the country code TLDs. For example, in some country domains, the second levels are generic categories
(such as .ac, .co, .go and .re), while in others they are based on political geography, and in still others, organization
names are listed directly under the country code.
The reasons for registering domains in foreign markets are similar to the reasons for registering trademarks abroad.
First, domain names may be registered in conjunction with an actual or planned export to and/or promotional activity
in the local market. In the absence of the foregoing, domain name registration may be sought in an attempt to stop
third parties from registering the mark/domain. Numerous trademark owners utilize the local domains in their local
marketing, with locally-oriented websites in the local language, ostensibly in an effort to give the impression that
"We're local!" and, at the same time, to spare the local user several time-consuming mouse-clicks that would be
necessary if the user clicked into the company's site through .com.

The Philippine [In]Experience

In the Philippines, local and foreign companies were not spared of legal and practical issues concerning domain names
registration. Some well-known companies have experienced problems in their attempt to register their own name as
domain name. For example, Jollibee Corporation had problems registering jollibee.com and jollibee.com.ph because
other parties were able to register these names ahead of Jollibee. Bank of Philippine Islands encountered similar
problems.

It is easy to obtain domain name registration in the Philippines. The country-code top level domain registry,
DotPHone, Inc.29 has introduced changes to its domain name registration procedure and dispute resolution policy.
Under the new registration policy, a domain name applicant is no longer required to have local presence or to have its
name registered with the Securities and Exchange Commission or the Department of Trade and Industry. Previously,
certain conditions had to be met, such as corporate presence in the Philippines and registration with the Philippines
Securities and Exchange Commission in order that one may apply for the registration of a .ph domain. Registration
may be done on-line on a "first-come, first-served" basis.

As regards, .ph domain name disputes, DotPHone's Uniform Domain Name Dispute Resolution Policy gives a detailed
indication of the procedures to be followed in the resolution of such disputes. Under this policy, DotPHone will not
decide domain name contests. Accordingly, a .ph domain will be cancelled, transferred or changed only under the
following circumstances: (a) upon the registrant's instruction; (b) upon order of a court or arbitral tribunal of
competent jurisdiction, requiring such action; and/or (c) upon a decision of a DotPHone-accredited administrativedispute-resolution service provider in any administrative proceeding in which the affected domain name registrant is a
party.
At present, the following are the administrative-dispute-resolution service providers approved by DotPHone: (CPR
Institute for Dispute Resolution [CPR]; (b) Disputes.org/eResolution Consortium [DeC]; (c) The National Arbitration
Forum [NAF]; (d) World Intellectual Property Organisation Arbitration and Mediation Centre [WIPO]. Among these
providers, it appears that the WIPO is the most reliable as it is the most sought after provider in most jurisdictions. All
the providers follow the Uniform Dispute Resolution Policy ("UDRP") by the Internet Council for Assigned Names
and Numbers ("ICANN"). Under the UDRP, the Complainant must establish each of the following to prevail: (1) the
registrant's domain name is identical, or confusingly similar, to a trademark or service mark of the Complainant; (2)
the registrant has no rights or legitimate interest in the domain name; and (3) the domain name has been registered and
used in bad faith.

Case Law: The PLDT case

There is a trademark infringement and unfair competition case pending before the intellectual property court of
Quezon City filed by the Philippine Long Distance Telephone Company ("PLDT") against Philippine League for
Democratic Telecommunications, Inc., the registrant of the domain name pldt.com. Among the reliefs sought by PLDT
in its complaint is a preliminary injunction against the continued operation of the web site which, notably, is hosted by
Network Solutions, Inc. ("NSI"), a service provider based in the United States. NSI was not impleaded in the action.
PLDT's causes of action include the protection of tradenames without need of registration, unfair competition under
R.A. 8293, and violation of the provisions on fair dealings under Article 19-21 of the Civil Code. Notably, the name
"PLDT" is not registered with the Intellectual Property Office. However, the PLDT's application for registration was
filed on 19 November 1997 with the IPO whereas defendant's first registration with NSI was on 16 February 1996 and
renewed on 21 July 1998. PLDT's domain registration for pldt.com.ph was made on 15 March 1996.
Defendant's defense is that its use of the mark is not commercial or for profit. It claims that the website is dedicated to
free speech in the form of personal commentary, parody and satire on current events, issues, free e-mail service and an
active public discussion board. Defendant claims protection under the Constitutional right to free expression.
The case is expected to be ultimately decided by the Supreme Court as it raises novel issues, including jurisdiction.
Among the defenses raised against the grant of an injunction is the lack of jurisdiction over the web site host, which
will ultimately be responsible for removing the site from the World Wide Web in case an injunction is issued.
CONCLUSION
The Philippines is years behind in terms of technology, even as it has acceded to the WTO Agreement. This Agreement
has revolutionized international business and economic relations among states, and has propelled the world towards
trade liberalization and economic globalization. Protectionism and isolationism belong to the past. Trade is no longer
confined to a bilateral system. There is now "a new era of global economic cooperation, reflecting the widespread
desire to operate in a fairer and more open multilateral trading system." Conformably